Saturday, May 8, 2010

Jobless Rate Rounding: Apr. Increase Wasn't 0.20%

According to data in Summary Table A. Household Data in yesterday's employment report unemployment rates were 9.7% in March and 9.9% in April, rounded to one decimal place. dding a few more decimal places, the jobless rates were 9.749% in March (which got rounded down to 9.7%), and 9.863% in April (which got rounded up to 9.9%).

Therefore, because the March rate was rounded down to 9.7% and the April rate was rounded up to 9.9%, it made it look like the jobless rate increased a full 0.20%, when in fact the actual increase was only about half that amount: 0.11%, or a little more than a 0.10% increase.

This probably happens in a lot of months and mostly goes unnoticed, but this is a clear case where reporting the jobless rate to only one decimal place made the official increase in the April jobless rate (+0.20%) appear much worse than it actually was (+0.11%).

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